Assume an economy that makes only one product and that year 3 is the base year.Output and price data for a five-year period are as follows.Answer the question on the basis of these data.
Refer to the data.In determining real GDP,the nominal GDP for:
A) each year must be multiplied by the relevant price index.
B) years 1 and 2 must be inflated.
C) years 4 and 5 must be inflated.
D) years 1 and 2 must be deflated.
Correct Answer:
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